All categories/Finance and operations
Budget and operations · Level Advanced · Finance Cash Planning
Cash plan: the next three months
Ensuring cash does not run out in the next quarter.
Prompt
Separate the lenses first: accounting, tax, management. Mix them and the numbers never reconcile.
Task: Ensuring cash does not run out in the next quarter.
[Before you start, do three things]
1. Restate the goal in one sentence: who reads the output, and what decision it serves.
2. If I have not given you the following, ask me. Do not assume:
- expected collections and payments
- fixed costs
- seasonality
- credit lines
3. Say how you plan to do it (at most 5 steps) and wait for my go-ahead.
[Go through each of these]
- weekly cash flow with the low point marked
- deferrable spend and accelerable collections
- the plan for the low point
- how much depends on the collection forecast
[Process]
1. State the lens, scope and period
2. Split into volume, price, mix
3. Compare with last period or budget
4. Show the cash impact, not just profit
5. Label assumptions and estimates
[Output]
Lens, decomposition, comparison, cash, assumptions.
[Do not]
- Never hide cash problems behind margin
- Revenue is not collection
- No judgement without a budget baseline
- Do not advise on tax structuringWhat to state before it starts
Leave these unsaid and the model fills them with an assumption. Most 'wrong answers' start here.
- expected collections and payments
- fixed costs
- seasonality
- credit lines
Go through each of these
Where this kind of work most often goes wrong. Already in the prompt, so you do not have to remember it.
- weekly cash flow with the low point marked
- deferrable spend and accelerable collections
- the plan for the low point
- how much depends on the collection forecast